ERP is required when the company grows and it gets difficult for the people who started the company to manage all the processes. Sometimes the problem starts due to multiple locations or time zones, and sometimes the formation of new branches caused by the growth in business requires easy and fast maintenances - which can be done by automated system. Sometimes the profits are huge and the company requires software to keep track of everyday dealing and provide information on time.
Benefits of ERP
Improves communication with clients: It enables better communication with clients and colleagues which improves business functioning. It provides job efficiency and helps in managing the business. Improved communication and on time decision helps in improving productivity and increases production cycles. There are many large organizations which use ERPs for easy management of various branches and production units.
Centrally managed data: Earlier the data was either typed to a spreadsheet or manually entered into the system - which raises the risks of errors and also delayed the complete procedure. The centrally managed data reduces the costs and also allows the organization to use its time towards productive activities. It reduces data redundancy and the data of an organization can be managed from one place .The data can be accessed from anywhere and it can be updated from any part of the world.
Prevents wastage and ensures accuracy: All the departments, manufacturing units, production houses, business units and accounting data of the organization is stored at one place which enables the organization to use standard methodology and it also bring in more profits as it prevents wastage. The database works like a data warehouse where any information related to the company can be assessed anytime from anywhere - the provision which was very difficult to get through manual system.
Business benefits: It enables easy transfer of information and the operations can be accessed through single interface. The system provides security to data and enables asset tracking. It improves management and raises business opportunities. It provides easy methodologies to view the future prospects of the business and improve the performance of management at a low cost. It helps in increasing margins as the administrative rework is reduced and it improves the utilization of labor and assets to provide better job. It helps in increasing focus on administrative tasks in an analytical way.
Improve transparency: It improves transparency in everyday transactions. The employee's performance can be viewed through automated system which is based on everyday work and outputs - which prevents favors in office. The overall performance of a department can be viewed through the reports of the department and the company can assess which business unit is performing better. The key performer of the unit can be analyzed and the work flow can be easily tracked. Automation prevents discrepancies as incorrect inputs can be tracked easily.
Proper resource utilization: It helps the company to make use of the resources although there is a feeling that it reduces human resources but it has been found that it provides proper information to the employee to deliver their best and makes their work easy.